L-1 Visa's Is Challenged

Date: Friday, May 30, 2003 1:15 PM

JOB DESTRUCTION NEWSLETTER

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> -----Original Message-----
> From: Norm Matloff [mailto:matloff@laura.cs.ucdavis.edu]
> Sent: Friday, May 30, 2003 11:49 AM
> To: Norm Matloff
> Subject: NYT article

> To: age discrimination/H-1B/L-1 e-newsletter

One interesting footnote is that it came out last week that one of the
author, Preysman, is a college intern whose father is CEO of a Silicon
Valley firm which hires H-1Bs. This caused complaints to the Time by
some activist critics of the H-1B and L-1 program, in light of the
recent scandal in which an NYT reporter was found to have fabricated
information in relation to his reporting. Both the Times and Preysman
himself assured the activists that the article would be fair. Preysman
noted that another journalist would write the piece with him, who
turned out to be Katy Hafner.

I have various comments on the piece:

But they are now routinely used by companies based in India

and

elsewhere to bring their workers into the United States and

then

contract them out to American companies -- in many instances to

replacements for American workers. The number of Americans who

have

been replaced by foreign contract workers is unknown.

American

companies that use contract workers have said that the decision to

so is based on factors like skills, and not on cost alone.

That last sentence is contradicted by the fact that the American firms
ADMIT that the Americans are often forced to train their L-1
replacements. In other words, it's the L-1s who lack the skills, not
the Americans. The article does bring this up later, but presents it
only as a "claim," when in fact the companies have admitted it, or at
least, when asked have replied, "We are doing what we feel is best for
our firm," implicitly admitting it. If the authors felt that the
latter
is not an admission, they should have asked the firms. And if he had
contacted Mike Emmons, he would have gotten internal Siemens memos
directing the Americans to train their replacements, if I recall
correctly.

The legal questions, however, remain murky. Steve Yale-Loehr,

who

teaches immigration law at Cornell, said that strictly speaking,

what

these companies are doing is legal, though perhaps not what

Congress

intended. However, Mr. Yale-Loehr added, "If Congress is upset

about

this, then Congress will act on it."

This passage is really disappointing, as it fails to mention that
Yale-Loehr is a practicing immigration lawyer who teaches at Cornell
only as a sideline (Adjunct Professor), and who has been an active
lobbyist for the H-1B program, for example presenting testimony to
Congress on behalf of the American Immigration Lawyer's Association
(AILA). I don't disagree with his assessment that what these firms are
doing is probably legal, but my point is that if it *is* legal, it is
because of loopholes which industry lobbyists like Yale-Loehr put in
the law, and the reader is not told that he is a lobbyist. And in that
light, it's interesting how he implies that Congress will do the Right
Thing if there is any problem, when in actually Congress does whatever
the AILA and the industry lobbyists want.

Unlike the H-1B visa, the L-1 does not require employers to

pay

workers prevailing wages. In addition, there is no cap on the

number

The H-1B prevailing-wage requirement is a sham. It has huge loopholes
which make it useless. Again, it is lobbyists like Yale-Loehr who put
those loopholes in the law and regulations.

Mr. O'Neill said that the people he knows who are currently
training their replacements will not talk about their
situation for fear of losing what is left of their jobs.
"They're scared to death they're going to lose their jobs
instantly versus six or eight or nine months down the
road," he said.

This is annoying. The wording here makes the reader wonder if O'Neill
is making this up, when Preysman knows full well that programmers like
Mike Emmons have stated this publicly.

Here is another outrage:

Some experts say that the use of L-1 visas for contract
workers is not widespread and that fears of losing jobs to
foreign workers are exaggerated.

"Even if this brouhaha is about a real problem, I think
when you look at the number of workers involved, it is a
totally insignificant drop in a massive labor market," said
Daryl Buffenstein, a immigration lawyer in Atlanta who has
corporate clients and is general counsel for the American
Immigration Lawyers Association.

The general counsel for the AILA qualifies as an "expert"???? The only
thing he "qualifies" for is someone with an egregiously vested interest
in the issue. One would think that the NEW YORK TIMES, our nation's
premier newspaper, would have better ethics than this. What's
next--statements denying the effect of smoking on health by "experts"
at Phillip Morris?

Moreover, it is disappointing to see the Times engage in a disturbing
journalistic practice which I've noticed in recent H-1B/L-1 coverage:
Technically the article might be called "balanced," in the sense it
devotes an equal amount of space to both sides of the issue. But other
than the brief mentions of the INS, the main sources for the H-1B/L-1
critics' point of view here are a couple of disgruntled workers,
whereas the "experts" cited are presenting the industry's point of
view.

Preysman interviewed me extensively for this article on two occasions
lasting close to an hour each time. He insisted on speaking to me
personally when I tried to beg off due to a very busy schedule and
severe hoarseness and coughing from a flu bug. Yet he ignored all the
information I gave him. For example, I emphasized to him that
underpayment of the H-1Bs was not just "anecdotal," but that there were
lots of studies available, most significantly including the
congressionally-sponsored NRC reprt. Yet he ignored all that, and
simply states here that unlike the L-1 program, the H-1B has
"safeguards" which insure that the prevailing wage is paid.

I often get e-mail from disgruntled programmers who tell me the press
is biased on the H-1B/L-1 issue. I always reply that they are wrong. I
have found over the years that the press coverage of this issue has
generally been very fair (if not always in much depth), with the
exception of only a few journalists, such as Miranda Ewell and Joanne
Jacobs of the San Jose Mercury News. (Neither is with the Merc now.)
Another was Amy Harmon of the NYT, who in January 1998 wrote what was
tantamount to a 3,000-word advertisement for the ITAA industry lobbying
group. The Times had better coverage of the issue later on, but the
article today ranks right up there with Ewell, Jacobs and Harmon in
shaming the journalistic profession.

Norm

http://www.nytimes.com/2003/05/30/technology/30VISA.html

May 30, 2003

Special Visa's Use for Tech Workers Is Challenged

By KATIE HAFNER and DANIEL PREYSMAN

AN FRANCISCO, May 29 With the economy in a slump, a growing number of
American technology workers say their jobs are going not only to
lower-cost foreign workers abroad, but also increasingly to workers who
enter the United States under a little-known visa category known as
L-1.

In the nearly three years since the technology bubble burst, the use of
L-1 visas to bring in workers with a large percentage from India has
become a popular strategy among firms seeking to cut labor costs. The
number of these temporary visas granted rose nearly 40 percent to
57,700 in 2002 from 41,739 in 1999.

The visas are intended to allow companies to transfer employees from a
foreign branch or subsidiary to company offices in the United States.
But they are now routinely used by companies based in India and
elsewhere to bring their workers into the United States and then
contract them out to American companies in many instances to be
replacements for American workers. The number of Americans who have
been replaced by foreign contract workers is unknown. American
companies that use contract workers have said that the decision to do
so is based on factors like skills, and not on cost alone.

Some immigration experts are questioning the legality of this use of
the visa. Officials at the Bureau of Citizenship and Immigration
Services, or B.C.I.S., a division of the Department of Homeland
Security that oversees the granting of L-1 and other work visas, say
the bureau is conducting an assessment of the L-1 visa to determine
whether there is misuse.

"If this is a company offering the services of their employee to go
work for another company, it sounds dubious," said Bill Strassberger, a
spokesman for B.C.I.S.

"To bring someone in ostensibly as an intracompany transfer and then
put him to work for somebody else and then to say that we're paying him
still, that just sounds like someone's trying to really stretch the
envelope on that visa category," Mr. Strassberger said.

The legal questions, however, remain murky. Steve Yale-Loehr, who
teaches immigration law at Cornell, said that strictly speaking, what
these companies are doing is legal, though perhaps not what Congress
intended. However, Mr. Yale-Loehr added, "If Congress is upset about
this, then Congress will act on it."

In response to the controversy, Rep. John L. Mica, a Republican from
Florida, introduced a bill this month to prevent companies from hiring
foreigners with L-1 visas.

"When you have people using this to bring in lower-cost labor to
displace Americans, it's something we need to address," Mr. Mica said
in a telephone interview.

During the boom years, the technology industries successfully lobbied
Congress to expand the number of foreign software engineers who could
be permitted to fill programming needs in the United States. In 2000,
Congress increased the annual cap on more restrictive temporary visas
known as H-1B visas for highly skilled foreign workers to 195,000 from
115,000. That quota will drop automatically to 65,000 on Oct. 1 unless
Congress approves an extension, a move that is considered unlikely.

In the last two years, the trend in the use of H-1B visas has declined
sharply. Many experts say the use of L-1 visas will grow.

Unlike the H-1B visa, the L-1 does not require employers to pay workers
prevailing wages. In addition, there is no cap on the number of L-1
visas.

This has ignited an outcry among technology workers who have lost jobs
and say that foreign contract workers are paid substantially less than
prevailing wages in the industry.

Over the last three years, William O'Neill has seen his small computer
consulting firm in East Granby, Conn., dwindle from six contract
workers to none. The work itself has not disappeared, said Mr. O'Neill,
but his clients, most of them large insurance companies in Connecticut
and western Massachusetts, are turning to foreign companies, some with
workers who are in the United States on temporary visas. Satyam
Computer Services, a consulting firm based in India, for example, now
has a contract with the Cigna Corporation that has around 100 Satyam
employees working on computer applications management in Cigna offices.

And as others have claimed, Mr. O'Neill said that in many cases,
existing technology employees are asked to train their replacements.
The L-1 visa requires that the foreign workers possess specialized
knowledge of the work to be done.

Mr. O'Neill said that the people he knows who are currently training
their replacements will not talk about their situation for fear of
losing what is left of their jobs. "They're scared to death they're
going to lose their jobs instantly versus six or eight or nine months
down the road," he said.

Once the replacement workers are trained, Mr. O'Neill said, the foreign
workers are often sent back to India to do programming and computer
work there for the American companies.

Wipro, InfoSys and Tata Consultancy Services, all of them based in
India, are other companies that are using L-1 visas to get workers into
the United States.

Girish Surendran, a human resources manager who oversees immigration
issues at Tata, said his company "is committed in letter and spirit to
all the requirements and regulations of all visa categories." He added:
"If workers are replaced, it's not that T.C.S. comes in and employees
get let go." Mr. Surendran said he could not comment on a company's
reason for laying workers off.

Wipro plans to lobby against Mr. Mica's bill. If it becomes law, said
Sridhar Ramasubbu, investor relations manager at Wipro, the company
will simply turn back to H1-B visas. "We will not be affected
financially because our compensation is the same whether somebody comes
in under an H-1 or an L-1," Mr. Ramasubbu said.

But trade groups representing American workers say the foreign workers
are paid considerably less. "I have friends that were told in the last
three months that they must take a $30,000 pay cut to keep their job,"
said John Bauman, president of the Organization for the Rights of
American Workers, a nonprofit group based in Meriden, Conn.

Gary Burns, the legislative director for Mr. Mica, said there were
about 325,000 L-1 visa holders in the United States. Those who stay in
this country can remain for up to five or seven years, depending on the
category of L-1 they hold.

Some experts say that the use of L-1 visas for contract workers is not
widespread and that fears of losing jobs to foreign workers are
exaggerated.

"Even if this brouhaha is about a real problem, I think when you look
at the number of workers involved, it is a totally insignificant drop
in a massive labor market," said Daryl Buffenstein, a immigration
lawyer in Atlanta who has corporate clients and is general counsel for
the American Immigration Lawyers Association.

Mr. Buffenstein said that those who oppose the L-1 visa do not
understand how important it is for American industry. "It will hurt
employment in the United States if we impede the ability of legitimate
users to transfer managers and specialists between different affiliates
of international organizations," said Mr. Buffenstein, a lawyer who
advised legislators on the law governing L-1 visas.

Mr. Buffenstein said he was also worried that public overreaction would
result in measures like the Mica bill, which he contended would go too
far in restricting international companies from using L-1 visa holders
to do on-site client work.

Controversy over the visa, which has been in existence for 33 years, is
not entirely new. Three years ago, the General Accounting Office
reported that the the Immigration and Naturalization Services, the
precursor to B.C.I.S., had found a high incidence of fraudulent use of
L-1 visas and had called abuse of the visas "the new wave in alien
smuggling."

But protest over the use of temporary foreign workers has become more
vocal in a rocky economy. One 57-year-old computer consultant in Avon,
Conn., who has been out of work for five months said, "This isn't just
an I.T. issue," referring to the information technology industry.

"It's a big issue with multiple professions, and has a serious effect
on the economy," said the consultant, who asked that his name not be
used for fear of jeopardizing his chances to find work. "A lot of this
is about the economy and the L-1 issue is just exacerbating the
problem."

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